Federal Street in Boston for Suffolk for generating revenue

ASSIGNMENT 4– RISK MANAGEMENT PLAN

Methodology

The project is to construct a new office tower at 150 Federal Street in Boston for Suffolk for generating revenue by selling or renting the building, and it needs to
get approved before December 2020 with the budget of $516,000,000. Any risks may exist in the construction project, and the risk management plan is focusing on
managing and controlling these risks to prevent them from becoming issues.

Process
We consider each step of the construction execution phase, and identify 25 risks, including 2 opportunity risks, which have probabilities to cause a negative or
positive impact on the entire construction process.
? Analyze Risks
After risks identified, we analyze when each risk might start and who should be responsible for it and make a draft of Risk Register. The register helps us to have a
preliminary understanding of the possible risks and estimated impact towards the entire project.
? Risks Assessment
After the first analysis, we score each risk, translating the likelihood and impact of a risk into more specific numbers, which is helpful to make response plan
accordingly.
? Risks Prioritization
The score of each risk helps us to prioritize them, determining that which risk needs to be made a plan to respond first. Then we come up with 10 critical risks, which
are with high score and needed to be prevented necessarily.
? Risk Response Plan
After the prioritization, we made 10 corresponding response plans to deal with those high-scored risks, ensuring that they would not become some serious issues and
reducing the probabilities of risks occurrences.
? Monitor & Change Management Plan
The risk management plan will be monitored through the entire construction execution phase by project manager and be prepared to make any changes to the risks
responses and the plan.

Tools
? Likelihood Matrix
We use the likelihood matrix to measure the probability of occurrence of each risk and become the basis of the risk prioritization.
? Impact Matrix
We take advantage of the impact matrix to analyze the impact caused by the different risks levels on the project and help to calculate the score of each risk.
? Heat Map
The heat map is used to prioritization and help to set the threshold to remind the project manager of different levels of the risks.
1. Roles and Responsibilities

There are 6 members in our team. We are all involved in the risks identification process and have different responsibilities in developing the plan.

Task Project Manager Team Member Construction Manager Sponsor Urban Construction Inspector
Initiate RMP R
Optimize RMP R S
Direct team on RMP R I
Follow RMP R R
Respond Risks R A
Monitor Management Progress R S
Report Status on Risks S R I I
Integrate responses with construction rules S I S A

R- Responsible A- Approval S- Support I- Inform
2. Budgeting

The project will set aside a contigency reserve of 10% of the total budget. That amounts to
$51.6M in contigency reserve for the new office building project.

In order to determine and acquire budget for a risk response strategy, we go through a change control management process that calls for the approvals from a change
board and the project sponsor before receiving the funding.

After a risk is deemed to require funding for a response strategy, a change form will be submitted to the change board awaiting approval. If the change board rejects
the proposal, a new change form will have to be submitted. If the change board approves the proposal, the change form proposal will go to the project sponsor. If the
project sponsor rejects the proposal, the proposal will go back to revising mode and go through change board approval again. If the project sponsor approves the change
form proposal, funding allocation will occur to get the required budget for the risk response strategy.
3. Timing

The risk response will be reviewed/revised frequently under these circumstances:

? The risk response will be reviewed every 2 weeks during the tracking and monitoring period.
? The risk response will be reviewed every time there are changes/updates to the risk and the related risks.

New risks, as well as current risk response strategies, will be discussed during project team weekly meetings to keep the risk plan up-to-date and to prepare response
plans effectively.
4. Risk Categories

The team used the following tools and techniques for identification of potential risks related to the project.
The risks identified were further categorised to
? Enable improved management focus
? Increase quality of risk identification
? Aid in developing effective risk responses The identified risks were categorised as follows
1. Technical Environmental Risk
2. Quality and Process Risk
3. Operational Risk
4. Infrastructure Risk
5. Supplier Risk
6. Technical and Architectural Risk
7. Programmatic Risks
6. Definition of Risk Probability and Impact

In our projects, we determine the priority of the risk by analyzing the likelihood and impact of the risk. In this model, an equation will be used to manage the risk
of the project: risk = likelihood x impact. This means that the priority of risk in this project will be the probability of an event multiplied by the subsequent
influence caused by this event. The risks will be assessed

in a simple way by comparing the score of the factor to another. At the same time, the likelihood and impact of the risk will be quantified as specific numbers.
Through the calculation of the above formula, each risk will have a corresponding risk score. Furthermore, the risk will be divided into three different sections and
made as a Heat Map based on the thresholds provided. The risk management plan will formulate a corresponding strategy.
Definition
? Likelihood: Likelihood is the probability of occurrence of an event that may influence the process of project.
? Impact: Impact is the potential influence caused by the risks. On the other word, when a risk become an issue, the problem it causes or the positive change it
may produce is the impact of a risk
7. Probability and Impact Matrix
Impact of Risk Costs Schedule Scope Quality
Very Low 1 less than $1 M Less than 1 day Scope impact barely discernable Minor defects in production
Somewhat Low 2 $1M-5M 1 day to 7 days Minor areas of scope impaired Small number of moderate defects in prod
Moderate 4 $5.01M-15M 8 days to 14 days Many minor areas of scope impaired Moderate number of moderate defects in prod
Somewhat High 6 $15.01M-30M 15 days to 30 days Major areas of scope impaired High number of moderate defects in prod
High 8 $30.01M-50M 31 days to 60 days Scope reduction unacceptable Major defects in prod
Extremely High 9 $50.01M-80M 61 days 120 days Final product undeliverable or useless Final product is inoperable

Probability of occurrence
Very Unlikely 1
Somewhat unlikely 3
50-50 possibility 5

Somewhat likely 7
Very likely 9
8. Revised Stakeholder’s Tolerances Thresholds

High 45-81
Middle 21-4018-44
Low 0-17
Heat Map

Original:

Likelihood
9
7 8 21 6&4&9&12 24 23
5 19 2&25 3&13 10&16&22
3 1&7&20 5&17 11&14 18
1 15
1 2 4 6 8 9

Impact
Updated:

Critical risk number Original score New score
3 40 4

4 42 14
6 42 4
9 42 6
10 45 18
12 42 18
13 40 4
16 45 12
22 45 4
23 63 12
Likelihood
9

7 4 6&4&9&12 23
5 3&13 10&16&22
3 9 16&23 10&12
1 6&3&13&22
1 2 4 6 8 9 Impact

9. Reporting Formats

The project manager will be a link in the reporting system, which is also the most important part. He/she will get the report from team members, being responsible for
leading and approving any specific tasks in the project. At the same time, he/she needs to report to sponsor and other stakeholders outside of the project, getting
approval from them and promoting the development of the project.
10. Tracking